He bought time, sure, but the time is up. Politically it's been up for a while, they just didn't care to notice until they lost an extremely safe Senate seat in a special election and finally people on the left other than Bernie Sanders started asking for Bernanke's head.
Economically, I'd rather doubt they have any time left, either, but we'll see, unfortunately my crystal ball only works for hockey (and no, the Habs will not make the playoffs this year, though spanking the Rangers like last night still is a pleasurable experience).
End of day, the Krugman/Black position has been to emphasize the solvency crisis aspect of the financial meltdown. The Geithner/Summers/Bernanke position has been to hope that the meltdown is more due to a liquidity crisis. The jury is still out, but my own view is that the latter position is as weak an equity position as all of those millions of homeowners whose mortgages are, in increasing numbers rounded to the million, underwater. Of course for this central issue, there is no credible plan... Fai de bèn a Bertrand, te lou rendra en cagant
I don't think there is a credible independent person in the US who would argue that the HAMP is anything but a big failure, all the serious finance and econ blogs (Krugman, Calculated Risk, Delong, et c.) agree on this but if you've got a cite to the contrary I'd love to see it. Fai de bèn a Bertrand, te lou rendra en cagant
Krugman has been warning since before Obama was elected that his stimulus plan was too small and that its likely failure would be interpreted as a failure of the concept of stimulus, not a failure to make it the right size... And here we are, a year after inauguration. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Could we get control of Goldman Sachs, Morgan Stanley, Wells Fargo, Citi and Bank of America in return for annual pensions of $1billion/year each for perpetuity and thereby be in the position to wind them down at minimum damage and spin off their useful functions into bite sized entities that would be such a deal as we cannot imagine. But they would want $50 or $100 billion each per year and that is not sustainable.
But their ongoing risk taking activities could end up costing even more than that for a few years. That is the scale of the problem. The above are top of the head estimates based on my sense from the reading I have been doing over the last years but I believe they are in the ball park. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
